Bad Phorm: EU demands UK Government response on intrusive web ad tracking technology

By Davey Winder
Wednesday, 06 August 2008 17:49

Regulation

Controversial behavioral advertising targeting outfit Phorm, whose Webwise ad technology monitors user browsing habits to serve appropriate advertising messages, might have dragged the UK Government into a slugfest with the European Union over a possible breach of strict Euro data laws...

Phorm was not the first, nor is it the only, player in the field of Web-based behavioural advertising technology. But it sure as heck remains one of the most talked about.

Fuelled by statements such as the one that appeared in the New York Times earlier this year by Phorm Chief Operating Officer Virasb Vahidi "As you browse, we’re able to categorize all of your Internet actions. We actually can see the entire Internet" the company seems happy to court controversy.

In the UK, Phorm has announced deals with three Internet Service Providers which would give it a reach of around 70 percent of the entire British broadband user market. And that is where it all started going wrong for Phorm.

It emerged that one of those ISPs, BT, had been running secret technology trials to test the Phorm Webwise system. Unfortunately it failed to inform the customers whose data was being used, whose habits were being monitored, during the trial.

What's more, BT actually denied the accusations of any trial initially and suggested that the redirects some customers had been experiencing must have been caused by malware installed on their machines.

It is oh so tempting to say that they were nearly right, given that Phorm changed its company name from 121Media in July 2007. 121Media were behind PeopleOnPage, an advertising engine wrapper classified as spyware by leading security researchers.

Although the UK Information Commissioner has already ruled that there will be no action taken against BT over the incident, the reasoning has not calmed the swell of outrage against both BT and Phorm.

Why didn't the Information Commissioner take action against BT, and why has the European Union Commissioner got involved? Story continues on page 2...

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